What Drives Us? Car Sharing Reflects Cultural Shift

Car2Go vehicles lined up in Washington, D.C., as the company prepared to launch service there last year. The car sharing service is also in Europe and other American cities, including Seattle; Austin, Texas; Miami; and Portland, Ore.

Chip Somodevilla
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Originally published on April 8, 2013 10:09 am

As car sharing continues to gain traction among American drivers, Car2Go is one company benefiting from the changing way we use cars.

Seattleite David Stewart doesn't own a car. Instead, the managing partner of a small social media company relies on Car2Go for getting around.

He picks one up of the cars first thing in the morning in his neighborhood and drives to the local coffeehouse. He works for a couple of hours and when he's ready to visit a client, he grabs another car, which he finds on an app on his smartphone. He reserves a tiny two-passenger Smart car across the street.

He swipes his membership card in front of a reader on the windshield to get in the car. "Now it's confirming my account, and you wait until the car is unlocked and now we can get in and start driving," Stewart says.

The idea is simple. Customers like Stewart take a car when they want it, drive it anywhere within the company's designated area and then just leave it. They might drive three or four different cars in a day, but pay only for the time they actually use the cars: 38 cents a minute, or if the trip is a long one, $14 an hour.

For Stewart it adds up to $150 a month, a fraction of what a car payment — plus gas parking and insurance — would be.

"It's truly a flexible, on-demand service for our customers," says Nicholas Cole, who heads up North American operations for Car2Go. He says it's not just 20- and 30-somethings or college students who are using it — so are retirees who've moved into the city and given up an automobile.

"Seattle is a great example. We launched Seattle right before Christmas, and here we are in April with over 18,000 people signed up," Cole says.

Nationwide, Car2Go claims about 90,000 members. Across the country about 10 times that number are using established car sharing services, according to Susan Shaheen, an expert in sustainable transportation at the University of California, Berkeley.

"What a lot of people are starting to see is the emergence of a lot of different companies and a lot of competition," Shaheen says.

She says Zipcar was the first company to gain attention for renting out cars on a short-term basis. More recently, a company called DriveNow, like Car2Go, offers one-way options. (Zipcar requires that you return the vehicle to its reserved parking spot when you're done driving it.)

And, says Shaheen, "now we see things like peer-to-peer car sharing where you can actually put your own personal vehicle into a car sharing system." Shaheen counts 12 personal car sharing companies in North America as of last month.

There's no question that economics are driving the car sharing market, but environmental concerns and the adaptation of smartphone technology are factors, too. So are cultural changes, says Jeffrey Tumlin of the transportation planning firm Nelson Nygaard.

"People of my generation believed that our private automobile said a lot about who we are, that [it] defined our power and our status. The younger generations don't seem to be buying into that anymore, and they are seeing automobiles as simply a tool," Tumlin says.

It's hardly surprising then that automakers see car sharing as a potential new market. Daimler owns Car2Go. BMW's offering is DriveNow. Volkswagen and Ford are exploring this market, too.

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Transcript

DAVID GREENE, HOST:

Time now for today's Bottom Line in business. We're taking a look at an idea that's getting more popular in this country - car sharing. The basic business model has been around for more than a decade, but new companies and concepts are emerging and expanding. Car2Go is one company that seems to be benefiting from the changing way we use cars. From Seattle, NPR's Wendy Kaufman reports that car sharing could reflect a shift in what cars say about us.

WENDY KAUFMAN, BYLINE: David Stewart doesn't own a car. Instead, the managing partner of a small social media company relies on Car2Go for getting around. He picks one up first thing in the morning in his neighborhood, and drives to the local coffeehouse. He works for a couple hours and when he's ready to visit a client, he grabs another, which he finds on an app on his smartphone.

DAVID STEWART: And these are the closest Car2Gos. And you see the little Car2Go icon there? There's one right across the street. So I'm just going to tap on that and now it's held for me.

KAUFMAN: We walk about 100 feet to the tiny two-passenger SmartCar.

STEWART: I'm going to go ahead and swipe my card across the screen. And now it's confirming my account. And you wait until the car's unlocked and now we can get in and start driving.

KAUFMAN: The idea is simple. Customers like Stewart take a car when they want it, drive it anywhere within the company's designated area and then just leave it .They might drive three or four different cars in a day but pay only for the time they actually use them - 38 cents a minute or 14 bucks an hour for a longer trip.

For Stewart, it all works out to about $150 a month - a fraction of what a car payment plus gas, parking and insurance would be.

KAUFMAN: Nicholas Cole heads up North American Operations for Car2Go He says its not just 20 and 30-somethings, or college students who are using the service. So are retirees who've moved into the city and given up an automobile.

COLE: Seattle is a great example. I mean, you know, we launched right before Christmas. And, you know, here we are in April with over 18,000 people have signed up.

KAUFMAN: Nationwide, they claim about 90,000 members. Across the country, about 10 times that many are using established car sharing services, according to Susan Shaheen an expert in sustainable transportation at the University of California, Berkeley.

SUSAN SHAHEEN: What a lot of people are starting to see is the emergence of a lot of different companies and a lot of competition.

KAUFMAN: She says Zipcar was the first company to gain attention for renting out cars on a short-term basis. More recently, a company called Drive Now - like Car2Go - offers one way options. And says Shaheen...

SHAHEEN: Now we see things like peer-to-peer car sharing where you can actually put your own personal vehicle into a car sharing system.

KAUFMAN: Shaheen counts 12 personal car sharing companies in North America as of last month.

There's no question that economics are driving the car sharing market, but environmental concerns and the adaptation of smartphone technology are factors too. So are cultural changes, says Jeffrey Tumlin of the transportation planning firm Nelson Nygaard.

JEFFREY TUMLIN: People of my generation believed that our private automobile said a lot about who were are; that defined our power and our status. The younger generations don't seem to be buying into that anymore and they're seeing automobiles as simply a tool.

KAUFMAN: It's hardly surprising then that automakers see car sharing as a potential new market. Daimler-Benz owns Car2Go; BMW's offering is Drive Now. Volkswagen and Ford are exploring this market too

Back in Seattle, David Stewart is about to end his current trip. He breezes into a parking spot, closes the windows and sets the parking brake.

STEWART: And it automatically ends the trip if you put the key in the spot.